Litecoin soared more than 30% on Wednesday morning, leading a bullish charge from the world’s top cryptocurrencies that has seen the market add nearly $40 billion in total capitalization over the past day alone.
According to CoinMarketCap.com, each of the top 10 largest cryptocurrencies by way of market cap have gained within the last 24 hours. In addition to Litecoin’s dominant surge, bitcoin has moved nearly 7% higher, Ethereum has added almost 5%, and Ripple has climbed roughly 3.5%.
Litecoin is leading the charge thanks to the announcement of the crypto’s first-ever “hard fork.” A hard fork in the cryptocurrency world refers to a change in the rules of the blockchain infrastructure that is not recognized as valid by the older software. Hard forks are similar to stock splits in that they are designed, in part, to alleviate barriers to entry for new users.
Once Litecoin hits block 1371111—which is expected to happen this Sunday afternoon—the newly-minted Litecoin Cash Foundation will initiate its split from the existing Litecoin blockchain. Those holding Litecoin at the time will automatically receive 10 new Litecoin Cash tokens for every one Litecoin they own.
The foundation said that its goal for the fork is to increase the “block speed” at which the network can process transactions. Litecoin Cash will use the “proof-of-work” mining method, which tends to be more energy intensive. Proof-of-work proponents argue that this method is more secure than what is currently used in the existing Litecoin network.
In a press release announcing the fork, the Litecoin Cash Foundation also boasted that this mining method will open the door for miners with outdated hardware to participate in the network.
“This allows an extension of life for older Bitcoin mining hardware, which is no longer powerful enough to mine Bitcoin; the lower anticipated difficulty of mining Litecoin Cash will put such legacy hardware to effective use,” the foundation wrote.
The Litecoin Cash fork follows in the footsteps of several bitcoin forks, including Bitcoin Cash and Bitcoin Gold. These forks were also implemented to smooth transactions and manage fees, and although some critics consider them scams, altcoin investors have been quick to jump in. Shortly after its launch in August, Bitcoin Cash became the fourth-largest cryptocurrency in terms of market cap.
But investors should remember that Litecoin Cash is not affiliated with the original Litecoin blockchain in any way. Litecoin’s creator, Charlie Lee, has already warned that hard forks of his cryptocurrency could be scams looking to benefit from its name.
“The Litecoin team and I are not forking Litecoin,” Lee tweeted. “Don’t fall for it and definitely don’t enter your private keys or seed into their website or client. Be careful out there!”
Still, the Litecoin Cash Foundation attempted to ensure traders that it was simply trying to solve common problems with the network, not scam users.
“While this [naming] convention isn’t ideal, it will be instantly understood by most hearing the name that Litecoin Cash is a hard fork of Litecoin,” the foundation’s Michael Wyszynski told Business Insider.
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